Posted on Friday, Nov 6th 2020
We’re big fans of bootstrapping, virtual companies, and domain knowledge. Field Pros Direct CEO Matt Anderson’s story has all those ingredients.
Sramana Mitra: Let’s start at the beginning of your journey. Where are you from? Where were you born and raised? What kind of background did you have? Matt Anderson: I’m from a small town northeast of Tennessee called Rogersville. It’s a rural area in the foothills of the Smokies. It’s very beautiful there. I went to East Tennessee State University. I had an aspiration to play football. That’s what drew me to that college. I grew up in that rural town and went on to East Tennessee State. Sramana Mitra: What did you do for education? What year did you graduate? What did you do after that? Matt Anderson: Growing up in a rural area and going to East Tennessee State, it’s hard for me to know what was possible. I wanted to experience something outside of that area. I wanted to go somewhere new. I wanted to go anywhere for the opportunity to get exposed to a bigger city or other types of opportunities that just aren’t available in this rural part of East Tennessee.
I had various job opportunities. One of them was at Crawford & Company. They are the world’s largest independent adjusting firm. They offered a two-week training program where we go to Atlanta and get trained to be an insurance adjuster for a couple of weeks.
Part of the deal was that for the next two or three years, I would go to wherever they would assign me to get exposed to different projects, leaders, and business units. I was a support person that would go all over the country to help with various adjusting projects. That was my first job out of college.
I started in the catastrophe department which dealt with a large volume of claims that could be from a hurricane, hailstorm, or any environmental accidents.
Sramana Mitra: It would be fire in California and earthquake. Matt Anderson: Absolutely. It could be environmental accidents like oil spill as well. I was in that department where I would help in various projects, which in a lot of cases would be these catastrophe type of events.
My goal at the company was to one day run that business – a catastrophe profit center. I was there for 10 years. During my last two years there, I was the VP for US and international catastrophe operations for the company.
Sramana Mitra: What year was this? When did you leave that job? Matt Anderson: I started in January 2001 and I left in January of 2011. Sramana Mitra: What happens next? Matt Anderson: Towards the end of my career at the company, I had a goal to start my own company. I was thinking of starting something in the adjustment space because that was what I knew so well. I was thinking of a modern version of an adjusting company.
I spent a lot of nights and weekends working on a business plan with the intention of starting my own company. I looked at a lot of franchises. I knew I wanted to own and run my own business.
There was an opportunity with Arrowhead. They were owned by private equity at that time. I was talking to them about them being potentially a customer. Ultimately, they allowed me to start a business to service some of their claims. They were going to be my first client. That’s the biggest fear in starting a new business.
In that particular scenario, I didn’t have any equity. I had a profit share, but they gave me free rein to build this company. We were profitable starting in the third month. I did that for five years.
Sramana Mitra: Why did they want you to start this company and what were you doing for these clients that they helped you acquire? Matt Anderson: They were working with another independent adjusting firm that they weren’t happy with for various reasons. They weren’t providing a certain level of service.
I started this company to replace that vendor. Based on the business plan, they gave me a chance and said, “If you are as good as you say you are and this works, then we’ll send you all our claims.” I started with one state and from there kept adding additional states. Their carriers had to approve. It wasn’t a sure thing even when I did that.
I took a much lower salary than what I had at Crawford & Company but in exchange for profit sharing. I didn’t have equity, which I didn’t love at the time. On the flip side, I was nervous about jumping in with two feet and not having a first client and having a long runway. This was a good proving ground for this five-year agreement to see if I could do what I thought I could do.
Sramana Mitra: Why did you stop doing this? What happened and what was the thinking? Matt Anderson: Even going into that arrangement I knew that my goal was still to start and run my own company. I ultimately ended up having a five-year agreement. That gave me a date on the horizon on when I wanted to be up and running with a new company. In the background, I started thinking about those things and started saving up for that goal.
Our conversation continues
here. This segment is a part in the series : Best of Bootstrapping . Bootstrapping to an Exit . Why is Bootstrapping Important? . How Can You Play this Low-Probability Game Intelligently? . Do NOT Go to VCs as Beggars - Go as Kings . Excess is NOT Required for Success . Bootstrap First and Raise Money Later . Some Bootstrapping to Exit Case Studies . The Buy Side of Bootstrapping to an Exit . Blitzscaling vs. Bootstrapping . Bootstrapping to Unicorns More »» . Cinedigm Acquires Bootstrapped 1Mby1M Company Future Today for $60 Million . Mailchimp Bootstraps to $600M Revenue . Bootstrapping from Arizona to $10 Million . Bootstrapped Basecamp Executes a No Nonsense Strategy . How Under30Experiences Bootstrapped to $5 Million . Bootstrapping with a Paycheck . How Algo.ai CEO Amjad Hussain Bootstrapped using Services from Michigan . Seed Investors Who Like Bootstrapped Businesses . How iHeartRaves CEO Bootstrapped a Niche e-Commerce Company to $20 Million . Bootstrapping with Services . 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